Death by Patent Troll

Carrie L. Lukas

IWF has written before about the important role that intellectual property rights play in our economy: It’s critical that businesses, entrepreneurs and investors own not just their property, but their ideas and creations, so that they can recoup the money they invest in development and make a profit, which ensures there’s an incentive for another round of innovation. Measures to fight cybercrime and prevent piracy should be taken as seriously as other efforts to prevent massive theft.

Unfortunately, our intellectual property system can also be abused by those seeking not to protect their legitimate creations, but to generate money by filing frivolous lawsuits. The abuse of the patent system by what’s commonly called “patent trolls” drains money from legitimate businesses, destroys jobs, and raises prices for consumers. Too often, it’s our legal system at its worst: Patent trolls run their cases through corrupt legal jurisdictions that have a financial incentive to rule in their favor. Companies that have done nothing wrong know that even if they were to win a court battle, they’d still hemorrhage time and money during the legal process. They often figure it's better just pay up rather than to try to take a stand. That decision may make sense on a cost-benefit analysis, but it sadly rewards the patent trolls.

Surely we can do better. Congress has been considering sensible reforms to the patent system which are designed to discourage abuse by patent trolls. Here’s the latest case to show why such reforms ought to be a priority: In this letter to Congress, the heads of several companies that provide services that allow people to contact emergency services explain how a patent troll “911 Notify” has been targeting them. 911 Notify holds a patent for the “idea of notifying friends and family that there is an emergency and someone has called for help.” These businesses explain that “911 Notify is using that patent like a bludgeon to tax our innovation, raise prices on American consumers, and literally put us out of business.”

This shouldn’t be. Policymakers need to find ways to provide better guidance on what can be patented so that it isn’t so broad that it prevents legitimate companies from offering unique and needed services to willing customers.

Issues like this get lost in the public debate because they sound technical. Yet we need policymakers to figure out how to get this right, because there are very real consequences for perpetuating a system that discourages innovation, including the creation of business designed to enhance our health and safety.

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Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.